>> tonight continuing fallout from the ris ig-- resignation of cii-- cia director david petraeus. congress returns this week but can it avoid the fiscal cliff? david martin outlines the budget cuts the pentagon is facing. california's vote for higher taxes for schools. carter evans talks to teachers and kids. >> we want to have a good life, we want to have great careers. >> jeff: and on this veteran's day lee cowan hears from parents who lost their only child to a man wearing an afghan army uniform. captioning sponsored by cbs this is the "cbs evening news." good evening, everyone, i'm jeff glor, two days after the abrupt resignation of

cia director david petraeus more details are emerging about the chain of events that lead to his depar ture. we begin tonight with bob orr in washington. >> good luck, sir. >> reporter: sources say the down fall of cia director david petraeus was rooted in jealousy. the f business, uncovered evidence of an affair between petraeus and his biographer paula broadwell after she sent harassing messages to another woman who broadwell thought was too close to petraeus. source have identified the second woman as 37-year-old jill kelley of the tampa area. cbs news has been told kelley is a civilian without does work for the u.s. central command. petraeus headed the central command from late 2008 to mid 2010. and during that time presented kelley and her husband an award for raising money to pay for junior enlisted men and women to attend military balls. petraeus has told friends that he had no romantic involvement with kelley.

and only saw her when she was with her husband. law enforcement officials say they found no evidence to refute that. and described kelley as a victim who received and messages.threatening some close to petraeus say he's told them the affair with broadwell began about two months after he took over the central intelligence agency in september 2011. and the affair ended about four months ago. friends of petraeus say he described the trust with broadwell as infrequent and he say he never pursued her after the affair ended. now law enforcement officials stress to us that kelley is in no trouble at all. in fact no one is roicly to face any criminal charges here. the fbi investigation in the end found only a personal affair and no concerns about national security. jses bob orr, thank you. after 52 days away members of congress get back to work on tuesday to the exact same place they left, the edge of a fiscal cliff. unless action is taken by january 1st, the bush era tax cuts expire and

across-the-board spending cuts automatically take place. the total cost 1.2 trillion in spending cuts over a decade. the congressional budget ofce says that contraction would lead the unemployment rate to rise to 9.1%. on face the nation today lindsey graham said while republican was not support raising taxes, they would consider other ways of raising revenue as part of a comprehensive plan. >> failure is not an option for the country when it comes to fiscal cliff. >> jeff: house speaker john boehner held a conference call with his members telling them compromise was needed. obama senior advisor david axelrod called boehner's congress to members encouraging. >> i think there are a lot of ways to skin this cat so long as everybody comes with a positive, constructive attitude toward the task. >> jeff: if the automatic spending cuts happen, exactly 50% of the board without fall on the pentagon.

national security correspondent david martin lays out what that would mean. >> reporter: the dreaded sequestration would double the $500 billion in cuts the pentagon is already planning to make over the next decade. defense secretary panetta has not minced words about what that would mean. >> if a sequestration is allowed to go into effect it will be a disaster for national defense. >> reporter: according to panetta the new american strategy of pivoting away from the wars in iraq and afghanistan toward the pas civic and an emerging chinese superpower would come undone. >> all of thatan go to hell if this congress doesn't face up and deal with the issue of sequestration. >> reporter: in this letter to senators panetta warned that by the time sequestration was over the u.s. would have its smallest ground force since 1940, smallest navy since 1915, and smallest air force ever. a bleak prediction which ignores the quantum leap in weapons technology between then and now.

as the president pointed out in the debates, no other country comes close. >> we spend more on our military than the next ten countries combined. china, russia, france, the united kingdom, you name it next test-- . >> reporter: sequestration would not change that according to the center for strategic and budgetary assessment it is not the size of the cuts, about $50 billion a year that would be so damaging but the fact that they would be across-the-board. panetta adds that except for military pay every program from the joint strike fight tore military band was be cut by the same amount, 23%. >> it's absolutely a foolish thing to do. if you want to cut the defense budget that's fine. this is a foolish way to do it. >> reporter: in other words, if the pentagon were allowed to pick and choose its cuts sequestration might not be the disaster secretary panetta is predicting. david martin, cbs news, the pentagon. >> jeff: pentagon contractors aren't the only one in with a stake in this

debate. 120,000 small contractors take part in the federal marketplace. a market worth $500 billion. >> lowell vant slot is scrambling to run every conceivable planning scenario for 2013. he's the military contracts manager for u.s. technologies which does 60% of its business with the defense department. >> not knowing exactly what to expect is not a position anybody wants to be in because we're affecting people's lives here. we don't want to laypeople off. >> we ran them all through. >> the $12 million new jersey based company makes parts in electronics for defense systems but with the potential for deep cuts in spending looming on january 2nd orders from the military are slowing down. >> they were supposed to order 4 -- of something, so far they've ordered two. >> this year american companies made 36 million meals ready to eat or mres. 9 million combat uniforms, nearly a million pairs of

combat boots. even the giants depend on thousands of smaller companies. 1300 suppliers in 45 states build lockheed martin's 535. boeing's c-17 contain parts in 44 states. all of it could be affected by the possibility of 1.2 trillion in spending cuts. >> when you suddenly stop that, that is when gruing to see catastrophic impacts on businesses and terms of their ability to survive, even. >> if the automatic cuts happen the congressional research service predicts a loss of 1.4 million jobs next year. now the recovery efforts from sandy. tonight more than 166,000 customers in three states remain without power. nearly two weeks after the storm. the death toll rose by one today to 113. fema says it's approved more than $411 million in housing and other individual aid.

mark strassmann is in brooklyn, new york where help is still needed. >> new york's veteran's day parade was also a salute to the city's recovery from sandy, at least in manhattan. >> i feel like i'm back in vietnam. >> but 14 miles away in brooklyn vietnam veteran danny smith walked to a gas line to wait for an hour for national guardsman to give him five free gallons. >> without the gas for this generator, you would be in trouble. >> i wouldn't be able to charge a cell phone. and the cell phone is your life line to the insurance companies and to other families who are trying to find out are you okay. >> and a cold night you wouldn't have heat. >> no heat. >> reporter: in brooklyn's working class gerrittsen beach community all the streets were flooded by sandy's storm surge. almost two weeks later no one here has power. >> tough, very tough t is scary it is dark here at night with no lights. >> reporter: 1700 of the 2400 homes were damaged or destroyed. and residents complained they have been forgotten in the city's recovery.

smith showed us the neighborhood. >> he got wiped out. she got wiped out. they got wiped out. >> reporter: his cousin's house is wet and cold. >> bathroom used to be over here. >> reporter: insurance inspectors is have yet to survey the damage caused by seven feet of floodwater in the basement. in this close knit multigenerational community many families lost everything. ruined heirlooms sit before many houses. but smith salvaged something special this veteran's day, letters he wrote to his moth frere vietnam. >> december 24th, 1966. >> yup, how do you put a price tag on that. >> reporter: many houses here look like this inside. dark, dank and depressing. this family has lived here for 42 years. they say they want to rebuild. but they're still waiting for the insurance adjuster and the power to come back on, jeff. >> jeff: mark strassmann, thank you. new jersey was the state hardest hit by sandy. as tony guida shows us tonight people along its

famed shore are trying to salvage what remains. >> reporter: no place took a stronger punch from sandy than ortley beach, new jersey. the town has been closed, off limits since the storm hit. today kim rosa got a police escort to see her home for the first time. it wasn't much to see. >> we were hoping to prepare ourselves and have an idea of what to expect. but i done think it could prepare you when you see it in person. >> reporter: the entire ground floor of rosa's house was washed away. a sorrowful sight for a woman coming here since she was a child. she hopes her children will be able one day to visit a rebuilt beach house. >> i hope we can go back and create new memories. >> reporter: 40 miles up the coast in union beach reclamation is well under way. carol doherty lost everything inside her home to sandy. but mennonites from pennsylvania are among the many volunteers who have been here for a week helping her and other homeowners recover. >> i think it's starting to

hit me today. but i still have to be grateful. there are friends that i work with that don't even have a home. >> reporter: of the 2300 homes here in union beach, fully 1400 sustained damage, 50 were destroyed. but homeowners here as with those across the jersey shore vow to rebuild if they can. tony guidea, cbs news, union beach, new jersey. >> jeff: later insider attack. the sorrow and anger of an american family whose shawn n was killed by an afghan soldier. the chinese businesswoman criticizing her country's leadership at a very delicate time. and californians decide to raise taxes on themselves. the implications of prop 30. those stories when the "cbs evening news" continues.

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cool. you found it. wow. nice place. yeah. [ chuckles ] the family thinks i'm out shipping these. smooth move. you used priority mail flat rate boxes. if it fits, it ships for a low, flat rate. paid for postage online and arranged a free pickup. and i'm gonna track them online, too. nice. between those boxes and this place, i'm totally staying sane this year. do i smell snickerdoodles? maybe. [ timer dings ] got to go. priority mail flat rate boxes. online pricing starts at $5.15. only from the postal service. >> jeff: explosion likely caused by a gas leak destroyed part of an indianapolis neighborhood last night. at least two people were killed, seven taken to the

hospital. the blast was felt three miles away and was followed by a fire. some three dozen homes were damaged or destroyed. california started the anti-tax revolution but after years of budget cuts and surging deficits this week voters in california reversed course. here's carter evans. >> one, two, three. >> reporter: for drama teacher leo krubsack and his middle school students the show would not have gone on if california voters rejected proposition 30. >> dance shows, choir shows, instrumental and band shows. >> reporter: all were on the chopping block. part of $6 billion in cuts that even a 7th grader like zachary alvarez knew could hurt his future. >> we need more education for kids because we want to get smarter. we want to have a good life, have great careers. >> reporter: but prop 30 doesn't actually increase education funding. it's intended to stabilize budgets after years of cuts. cuts that were so severe

governor jerry brown said today new taxes were the only option. >> in california you can only cut schools and university so much. and then people say enough already. >> reporter: prop 30 temporarily raises the state sales tax in some areas to more than 9%. it also hikes state income tax for those making more than $250,000 a year to the highest levels in the nation. but parents and educators now have another concern. prop 30 doesn't guarantee that all the new tax money will actually end up going to school. that is because the money goes into the state's general fund where there are many competing interests. so parents like shana landberg are going to be watching closely. >> if they think that the money is not actually getting to the schools, i don't think you will be able to go back and ask for money again for education, for a long, long time. >> let's go, let's win. >> reporter: it was a hard fought campaign and many teachers woke up wednesday morning unsure if they would get a taxpayer reprieve.

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>> jeff: this week china ruling communist party will formally annoint the country's new leadership, dissent is rarely tolerated in china but as bill wlit kerr reports tonight one prominent woman is not afraid to voice her criticism of the government. >> reporter: in a country of 1.3 billion people hung huang stands out. she is a debting mother, columnist, a blogger. she owns a high end fashion boutique, publishes a trendy fashion magazine. she is a tastemaker and opinion maker known for her bold fashion statements and her bold statements. >> you think all the communists in china believe in communism? i think that is the biggest joke. >> reporter: what do they believe in? >> money, for sure. >> reporter: her mother was mao zedong's english tutor and translator during president nixon's visit.

>> hung was educated in the u.s. as vasser. she loves to promote chinese design as much as she loves to poke china's leaders for arrogance and corruption. >> if i see something i don't like, i just say something. i'm just blabbermouth. i think it's part of my american education more than anything else. >> reporter: how do you get away with it? >> how do they get away with it is the question, really. >> reporter: in a country with little tolerance for dissent huang boldly pushes the limits. she had a talk show but walked away because the government sen sord her guests. she now has almost 6 million followers on china version of twitter. >> how do you know you've gone too far? >> it's called the 3 ts. right, the tibet, taiwan and tiananmen. that you don't talk about. >> but she is seeing china change. when high ranking politica political-- political leader bo xilai-- xilai recommend brought down by scandal, his wife convicted of killing a britishman, millions of others joined her in a

freewheeling internet discussion. >> it is a huge crack in the wall for sure because i don't think any political problem has been so played out in publishing-- public ever before. >> reporter: her mother was arrested during the cultural revolution. she wants her daughter's china to be a more open place. she hopes new leaders picked by the congress will be agents of change. >> the change in leadership gives people reason to hope. there's an opportunity there. >> possibility of change. >> there's a possibility, right, exactly. >> reporter: its if not, hung huang will speak out. bill whitaker, cbs news, beijing. >> jeff: just ahead, remembering a young american soldier shot to death by a supposed afghan ally. the pitch! whoa! so why are you doing his? only your doctor can determine if your persistent heartburn is actually something more serious like acid reflux disease.

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coalition including 37 americans have died so far this year in 44 attacks by afghans wearing army or police uniforms. >> for at least one american family who lost a loved one, an insidary tack isn't combat at all. as far as they're concerned, it's murder. lee cowan has their story. >> it was supposed to be a nine month deployment. an army specialist just 21 would have been home from afghanistan in time for thanksgiving. instead, his body came back to baker city oregon on labor day to a hero's welcome. >> all the way into town people lined both sides of the streets. and holding flags, just showing their support. >> he had joined the army right out of high school he was smart, good with a rifle and level headed. it was the best his mom and dad could hope for. >> if it were a fair fight, you know what i mean, if

mabry was given the chance than we knew he would be okay. >> reporter: but a few months back mabry's usually upbeat e-mails changed. >> the last thing that he wrote was that he was scared and that he was afraid he wasn't coming home. >> reporter: and what was he afraid of? >> he said what he really felt that his most dangerous part of his job was working with the afghan soldiers. he thought that if something was going happen t that is probably what was going get him. >> reporter: did he feel like he was constantly looking over his shoulder. >> yes, he quit sleeping. he wouldn't sleep at all. >> reporter: in automatic mabry's unit was clearing a vehicle hit by a roadside bomb when an afghan soldier in a passing convoy opened fire. man rooi and staff sergeant birdwell died instantly. >> basically his gun hold 57 to 100 rounds and he shot them all at both of them within 10 seconds and none of the afghan soldiers, the other guys that were with him tried to stop him in any way, shape or form.

>> reporter: the gunman was later killed by u.s. troops. his family chraping he had been trained by at taliban called him a martyr. >> he's not a mar ter, it's just a murder es. that's not combat, that is just cowardice. >> trust between u.s. and afghan forces is being tested as never before. and mabry's family fears the afghan patience is wearing thin too. >> we talked with mabry and his friends. they feel like the vast majority of people don't want them there any more. they feel like they really do hate them. >> reporter: mabry didn't expect war to be an easy fight. what he did expect was a fair fight. lee cowan, cbs news, baker city, oregon. >> jeff: that is the "cbs evening news" tonight. later on cbs, "60 minutes." i'm jeff glor, cbs news in new york. scott pelley will be here tomorrow. good night. captioning sponsored by cbs captioned by media access group at wgbh access.wgbh.org